Oh No A New Stock Market Effect, The Celebrity Effect!
First it was the January effect, then sell in may and go away…now its the celebrity effect. If you want to boost your share price…put a celeb on the board.
Excellent find via Finance Professor Blog
“According to “Reaching for the Stars: The Appointment of Celebrities to Corporate Boards”, a new study by four American-based economists, simply announcing that a celebrity is joining a board gives the company’s share price a boost. Disney’s share price jumped by 4.2% on the day Mr Poitier was appointed. But, for the more than 700 celebrity director appointments (out of over 70,000 board appointments in all) that the study examines during 1985-2006, the firms’ shares continued to outperform significantly over the subsequent one, two and three years.”